UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest reported): December 14, 2021

 

Novo Integrated Sciences, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   001-40089   59-3691650
(State or other jurisdiction   (Commission   (IRS Employer
of Incorporation)   File Number)   Identification Number)

 

11120 NE 2nd Street, Suite 100, Bellevue, WA 98004

(Address of principal executive offices)

 

(206) 617-9797

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CF$ 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on which Registered
Common Stock, $0.001 par value   NVOS   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 
 

 

Item 2.02. Results of Operations and Financial Condition.

 

On December 14, 2021, Novo Integrated Sciences, Inc. (“Novo”) issued a press release announcing Novo’s financial results for its fiscal year ended August 31, 2021. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this Current Report on Form 8-K.

 

The information furnished pursuant to this Item 2.02, including the information contained in Exhibit 99.1, is “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent such other filing specifically incorporates such information by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
     
10.1  

Press release of the registrant issued on December 14, 2021.

 

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Novo Integrated Sciences, Inc.
   
Dated: December 14, 2021 By: /s/ Robert Mattacchione
    Robert Mattacchione
    Chief Executive Officer

 

 

 

 

Exhibit 10.1

 

 

Novo Integrated Sciences Reports Fiscal Full Year 2021 Financial Results

 

BELLEVUE, Wash., December 14, 2021 - Novo Integrated Sciences, Inc. (NASDAQ:NVOS) (the “Company” or “Novo”), pioneering a holistic approach to patient-first health and wellness through a multidisciplinary healthcare ecosystem of services and product innovation, today reported its financial results for the fiscal year ended August 31, 2021.

 

“This has been a transformative year for Novo. We have invested in several undervalued assets that collectively are core to our differentiated platform solution for healthcare delivery that puts the patient-first. In addition, the Company invested in the necessary human capital required to commercialize our technology offerings, as well as many of our product solutions,” stated Robert Mattacchione, the Company’s CEO and Board Chairman. “We have strategically made investments in Acenzia, PRO-DIP, EK-Tech Solutions, Terragenx, and brick and mortar pharmacy locations, each of which complements our organic operations. This diverse patient offering of products and services will be overlaid on Novo Connect, our sophisticated and secure mobile application, to provide data to patients in real time. We look forward to the official launch of NovoConnect in early 2022 and making further investments in the healthcare space by expanding into new jurisdictions both in North America and overseas.”

 

Financial Highlights for the Fiscal Year Ended August 31, 2021:

 

  ● As of August 31, 2021, the Company’s cash and cash equivalents were $8.3 million, total assets were $61.9 million, total liabilities were $18.2 million, and stockholders’ equity was $43.9 million.
     
  ● Revenues for the fiscal year ended August 31, 2021 were $9.3 million, representing an increase of $1.4 million, or 17.7%, from $7.9 million for the same period in 2020, principally due to periodic easing of COVID pandemic-related restrictions and approximately $0.4 million of revenue from Acenzia from the date of acquisition (June 24, 2021) through August 31, 2021.
     
  ● Net loss attributed to Novo Integrated Sciences, Inc. for the year ended August 31, 2021 was $4,462,147, representing a decrease of $453,007, or 9.2%, from $4,915,154 for the same period in 2020. The decrease in net loss is principally due to (i) an increase in revenues and gross profit offset by additional operating costs associated with the Acenzia acquisition, (ii) an increase in amortization of intangible assets, (iii) common stock issued for services including successful uplist to the Nasdaq Capital Markets, (iv) salary expense due to hiring of senior level executives, and (v) legal fees related to the Company’s Nasdaq listing and filing of the Company’s registration statement on Form S-3.

 

Operational Milestones to Date:

 

  ● Signed letter of intent to acquire seven pharmacies in the United States that collectively generated $55 million in annualized sales in 2020.
     
  ● Acquired majority stake in Terragenx and intellectual property for FDA and Health Canada approved water-soluble iodine micro-nutrient in an all-share transaction priced at $3.35 per share.
     
  ● Completed acquisition of Acenzia, a company that provides nutraceutical health solutions through advanced bio-science research and development, proprietary manufacturing, and personalized diagnostics in an all-share transaction at $3.91 per share.
     
  ● Completed the acquisition of PRO-DIP, a company that has developed an innovative, patent-pending oral pouch delivery system technology which allows for broad market applications related to nutritionally focused products and medicinal based formulations in an all-share transaction at $3.98 per share.
     
  ● Announced joint venture with EK-Tech Solutions for enhanced telehealth platform.

 

 
 

 

Corporate Highlights for the Fiscal Year Ended August 31, 2021:

 

  ● Uplisted to the Nasdaq Capital Market in February 2021.
     
  ● Closed on a registered direct offering of approximately $8 million at $3.35 per share.
     
  ● Appointed Dr. Indrajit (Indra) Sinha, Ph.D. as Chief Scientific Officer.
     
  ● Formed a Medical Advisory Board comprised of Dr. Joseph M. Chalil, Dr. Michael G. Muhonen, and Dr. Zach P. Zachariah to provide important insight and expertise as the Company expands its personalized consumer engagement across all aspects of the patient/practitioner relationship through the integration of medical technology, advanced therapeutics, and rehabilitative sciences.
     
  ● Appointed new President and senior leadership for Novo Healthnet Limited, Novo’s wholly owned subsidiary.
     
  ● Increased size of Board of Directors from 4 to 7 members and appointed Michael Pope, Robert Oliva, and Alex Flesias as independent directors.
     
  ● Formed Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

 

About Novo Integrated Sciences, Inc.

 

Novo Integrated Sciences, Inc. is pioneering a holistic approach to patient-first health and wellness through a multidisciplinary healthcare ecosystem of services and product innovation. Novo offers an essential and differentiated solution to deliver, or intend to deliver, these services and products through the integration of medical technology, advanced therapeutics, and rehabilitative science.

 

We believe that “decentralizing” healthcare, through the integration of medical technology and interconnectivity, is an essential solution to the rapidly evolving fundamental transformation of how non-catastrophic healthcare is delivered both now and in the future. Specific to non-critical care, ongoing advancements in both medical technology and inter-connectivity are allowing for a shift of the patient/practitioner relationship to the patient’s home and away from on-site visits to primary medical centers with mass-services. This acceleration of “ease-of-access” in the patient/practitioner interaction for non-critical care diagnosis and subsequent treatment minimizes the degradation of non-critical health conditions to critical conditions as well as allowing for more cost-effective healthcare distribution.

 

The Company’s decentralized healthcare business model is centered on three primary pillars to best support the transformation of non-catastrophic healthcare delivery to patients and consumers:

 

  ● First Pillar: Service Networks. Deliver multidisciplinary primary care services through (i) an affiliate network of clinic facilities, (ii) small and micro footprint sized clinic facilities primarily located within the footprint of box-store commercial enterprises, (iii) clinic facilities operated through a franchise relationship with the Company, and (iv) corporate operated clinic facilities.
     
  ● Second Pillar: Technology. Develop, deploy, and integrate sophisticated interconnected technology, interfacing the patient to the healthcare practitioner thus expanding the reach and availability of the Company’s services, beyond the traditional clinic location, to geographic areas not readily providing advanced, peripheral based healthcare services, including the patient’s home.
     
  ● Third Pillar: Products. Develop and distribute effective, personalized health and wellness product solutions allowing for the customization of patient preventative care remedies and ultimately a healthier population. The Company’s science-first approach to product innovation further emphasizes our mandate to create and provide over-the-counter preventative and maintenance care solutions.

 

 
 

 

Innovation through science combined with the integration of sophisticated, secure technology assures Novo Integrated Sciences of continued cutting edge advancement in patient first platforms.

 

For more information concerning Novo Integrated Sciences, please visit www.novointegrated.com . For more information on NHL, please visit www.novohealthnet.com

 

Twitter, LinkedIn, Facebook, Instagram, YouTube

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “intend,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in Novo’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond Novo’s control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects Novo’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Novo assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The contents of any website referenced in this press release are not incorporated by reference herein.

 

Chris David, COO-President

Novo Integrated Sciences, Inc.

chris.david@novointegrated.com

(888) 512-1195

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

As of August 31, 2021 and 2020

 

    August 31,     August 31,  
    2021     2020  
             
ASSETS                
                 
Current Assets:                
Cash and cash equivalents   $ 8,293,162     $ 2,067,718  
Accounts receivable, net     1,468,429       1,732,432  
Inventory     339,385       -  
Other receivables, current portion     814,157       302,664  
Prepaid expenses and other current assets     218,376       191,723  
Total current assets     11,133,509       4,294,537  
                 
Property and equipment, net     6,070,291       353,660  
Intangible assets, net     32,436,468       26,623,448  
Right-of-use assets, net     2,543,396       2,810,556  
Other receivables, net of current portion     692,738       287,775  
Acquisition deposits     -       383,700  
Goodwill     9,081,879       636,942  
TOTAL ASSETS   $ 61,958,281     $ 35,390,618  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
                 
Current Liabilities:                
Accounts payable   $ 1,449,784     $ 883,773  
Accrued expenses     1,129,309       194,708  
Accrued interest (principally to related parties)     366,280       346,264  
Government loans and notes payable, current portion     4,485,649       83,292  
Due to related parties     478,920       528,213  
Finance lease liability, current portion     23,184       -  
Operating lease liability, current portion     530,797       563,793  
Total current liabilities     8,463,923       2,600,043  
                 
Debentures, related parties     982,205       952,058  
Notes payable, net of current portion     5,133,604       -  
Finance lease liability, net of current portion     16,217       -  
Operating lease liability, net of current portion     2,057,805       2,266,887  
Deferred tax liability     1,500,372       -  
TOTAL LIABILITIES     18,154,126       5,818,988  
                 
Commitments and contingencies     -       -  
                 
STOCKHOLDERS’ EQUITY                
Novo Integrated Sciences, Inc.                
Convertible preferred stock; $0.001 par value; 1,000,000 shares authorized; 0 and 0 shares issued and outstanding at August 31, 2021 and 2020, respectively     -       -  
Common stock; $0.001 par value; 499,000,000 shares authorized; 26,610,144 and 23,466,236 shares issued and outstanding at August 31, 2021 and 2020, respectively     26,610       23,466  
Additional paid-in capital     54,579,396       44,905,454  
Common stock to be issued (3,622,199 shares)     9,236,607       -  
Other comprehensive income     991,077       1,199,696  
Accumulated deficit     (20,969,274 )     (16,507,127 )
Total Novo Integrated Sciences, Inc. stockholders’ equity     43,864,416       29,621,489  
Noncontrolling interest     (60,261 )     (49,859 )
Total stockholders’ equity     43,804,155       29,571,630  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 61,958,281     $ 35,390,618  

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended August 31, 2021 and 2020

 

    Years Ended  
    August 31,     August 31,  
    2021     2020  
             
Revenues   $ 9,305,255     $ 7,860,567  
                 
Cost of revenues     5,482,257       4,802,195  
                 
Gross profit     3,822,998       3,058,372  
                 
Operating expenses:                
Selling expenses     7,525       4,921  
General and administrative expenses     8,089,641       7,286,305  
Write down of assets     99,351       29,744  
Total operating expenses     8,196,517       7,320,970  
                 
Loss from operations     (4,373,519 )     (4,262,598 )
                 
Non operating income (expense)                
Interest income     45,687       33,627  
Interest expense     (165,003 )     (156,662 )
Other income (expense)     21,900       (194,055 )
Write off of acquisition deposit     -       (344,521 )
Total other income (expense)     (97,416 )     (661,611 )
                 
Loss before income taxes     (4,470,935 )     (4,924,209 )
                 
Income tax expense     -       -  
                 
Net loss   $ (4,470,935 )   $ (4,924,209 )
                 
Net loss attributed to noncontrolling interest     (8,788 )     (9,055 )
                 
Net loss attributed to Novo Integrated Sciences, Inc.   $ (4,462,147 )   $ (4,915,154 )
                 
Comprehensive loss:                
Net loss     (4,470,935 )     (4,924,209 )
Foreign currency translation (loss) gain     (208,619 )     60,777  
Comprehensive loss:   $ (4,679,554 )   $ (4,863,432 )
                 
Weighted average common shares outstanding - basic and diluted     24,774,454       23,034,081  
                 
Net loss per common share - basic and diluted   $ (0.18 )   $ (0.21 )

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Years Ended August 31, 2021 and 2020

 

                                        Total              
                Additional     Common     Other           Novo              
    Common Stock     Paid-in     Stock To     Comprehensive     Accumulated     Stockholders’     Noncontrolling     Total  
    Shares     Amount     Capital     Be Issued     Income     Deficit     Equity     Interest     Equity  
                                                       
Balance, August 31, 2019     22,369,150     $ 22,369     $ 36,014,525     $ -     $ 1,138,919     $ (11,591,973 )   $ 25,583,840     $ (39,632 )     25,544,208  
                                                                         
Common stock issued for cash     35,437       35       113,364       -       -       -       113,399       -       113,399  
Common stock issued for licensing agreement     800,000       800       5,247,200       -       -       -       5,248,000       -       5,248,000  
Common stock issued for software license     96,558       97       386,134       -       -       -       386,231       -       386,231  
Common stock issued for conversion of related party debt     15,091       15       226,348       -       -       -       226,363       -       226,363  
Common stock issued for services     150,000       150       589,850       -       -       -       590,000       -       590,000  
Fair value of modification of stock option terms     -       -       62,822       -       -       -       62,822       -       62,822  
Fair value of stock options     -       -       2,265,211       -       -       -       2,265,211       -       2,265,211  

Foreign currency translation gain

    -       -       -       -       60,777               60,777       (1,172 )     59,605  
Net loss     -       -       -       -       -       (4,915,154 )     (4,915,154 )     (9,055 )     (4,924,209 )
                                                                         
Balance, August 31, 2020     23,466,236       23,466       44,905,454       -       1,199,696       (16,507,127 )     29,621,489       (49,859 )     29,571,630  
                                                                         
Common stock issued for cash, net of offering costs     2,409,955       2,410       7,325,170       -       -       -       7,327,580       -       7,327,580  
Common stock for services     295,700       295       874,878       -       -       -       875,173       -       875,173  
Common stock issued for acquisition     189,796       190       430,647       -       -       -       430,837       -       430,837  
Common stock issued for intellectual property     240,000       240       875,760       -       -       -       876,000       -       876,000  
Common stock to be issued for purchase of Acenzia, Inc.     -       -       -       9,236,607       -       -       9,236,607       -       9,236,607  
Exercise of stock options     7,500       8       11,992       -       -       -       12,000       -       12,000  
Fair value of stock options     -       -       155,496       -       -       -       155,496       -       155,496  
Rounding due to stock split     957       1       (1 )     -       -       -       -       -       -  
Foreign currency translation loss     -       -       -       -       (208,619 )     -       (208,619 )     (1,614 )     (210,233 )
Net loss     -       -       -       -       -       (4,462,147 )     (4,462,147 )     (8,788 )     (4,470,935 )
                                                                         
Balance, August 31, 2021     26,610,144     $ 26,610     $ 54,579,396     $ 9,236,607     $ 991,077     $ (20,969,274 )   $ 43,864,416     $ (60,261 )   $ 43,804,155  

 

 
 

 

NOVO INTEGRATED SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended August 31, 2021 and 2020

 

    Years Ended  
    August 31,     August 31,  
    2021     2020  
             
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (4,470,935 )   $ (4,924,209 )
Adjustments to reconcile net loss to  net cash used in operating activities:                
Depreciation and amortization     1,724,122       1,445,076  
Fair value of vested stock options     155,496       2,265,211  
Expense associated with modified stock option terms     -       62,822  
Common stock issued for services     875,173       590,000  
Operating lease expense     642,991       541,530  
Gain on forgiveness of debt     (21,900 )     -  
Write down of assets     99,351       29,744  
Loss on settlement of other receivable     -       74,360  
Write off of acquisition deposit     -       344,521  
Changes in operating assets and liabilities:                
Accounts receivable     1,103,800       (229,015 )
Inventory     (147,814 )     -  
Prepaid expenses and other current assets     (43,194 )     61,218  
Accounts payable     (45,228 )     (275,895 )
Accrued expenses     (287,034 )     (15,591 )
Accrued interest     9,015       114,815  
Operating lease liability     (618,645 )     (526,281 )
Net cash used in operating activities     (1,024,802 )     (441,694 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of property and equipment     (255,949 )     (12,110 )
Cash paid for acquisition     (10,000 )     -  
Cash acquired with acquisition     3,738,171       -  
Amounts loaned for other receivables     (473,100 )     -  
Payment for acquisition deposit     -       (636,985 )
Return of acquisition deposit     -       636,985  
Collection of other receivable     -       669,240  
Net cash provided by investing activities     2,999,122       657,130  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Repayments to related parties     (246,327 )     (198,778 )
Repayments of debenture, related party     -       (267,696 )
Repayments of notes payable     (2,767,519 )     -  
Repayments of finance leases     (8,872 )     -  
Proceeds from government loans and note payable     -       81,388  
Proceeds from the sale of common stock, net of offering costs     7,327,580       113,399  
Proceeds from exercise of stock options     12,000       -  
Net cash provided by (used in) financing activities     4,316,862       (271,687 )
                 
Effect of exchange rate changes on cash and cash equivalents     (65,738 )     40,303  
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     6,225,444       (15,948 )
                 
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR     2,067,718       2,083,666  
                 
CASH AND CASH EQUIVALENTS, END OF YEAR   $ 8,293,162     $ 2,067,718  
                 
CASH PAID FOR:                
Interest   $ 144,987     $ 95,219  
Income taxes   $ -     $ -  
                 
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Common stock issued for intangible assets   $ 876,000     $ 5,634,231  
Common stock issued for debt   $ -     $ 226,363  
Common stock issued for acquisition   $ 430,837     $ -